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EXHIBIT 10.21
ONSITE SERVICES AGREEMENT
INTRODUCTION
THIS AGREEMENT is entered into between Curtice Burns Foods, Inc.
("Client") and SCT Software & Resource Management Corporation ["SCT (TMD)"], a
wholly-owned subsidiary of Systems & Computer Technology Corporation, on the
Effective Date of June 18, 1997
BACKGROUND
SCT (TMD) is in the business of providing computing services to the
commercial market. SCT (TMD) and Client desire to enter into this Agreement
pursuant to which SCT (TMD) will plan, manage, provide and operate certain
information systems environments for Client, all in accordance with the terms
and conditions of this Agreement and as more fully set forth in the Scope of
OnSite Services described in Exhibit A.
Accordingly, the parties agree as follows:
TERMS AND CONDITIONS
SECTION 1. DEFINITIONS. The following definitions will apply to the terms used
in this Agreement:
"ADAGE Software" means those certain software products identified in
the License Agreement, for which SCT (MDS) granted Client a license to use as
provided for in the License Agreement.
"Agreement" means this OnSite Services Agreement.
"Application Software" means the application computer programs,
manuals, documentation and other related materials.
"AWP" means, in each instance, the Annual Work Plan described in
Exhibit A to be developed under this Agreement by SCT (TMD) for Client, as each
such Annual Work Plan may be updated by the parties from time to time.
"Cause" means termination of employment by or for any one of the
following: (a) an employee's voluntary resignation from employment; (b) the
death or disability of an employee; (c) the continuing failure by an employee
substantially to perform his or her duties and obligations of employment; or (d)
the willful misconduct of the employee.
"Client Contract Administrator" means that person designated by Client
to serve in such position under Section 4.2 of this Agreement, including such
person's successor(s) in that position.
"Confidential Information" means: (i) all Application Software and
Systems Software which is licensed or otherwise provided to a party with notice
of its confidential nature or restrictions as to its use; (ii) all business,
financial, statistical, personnel and technical data in tangible and/or
intangible form which a party maintains as confidential (including without
limitation Client's customer lists); and (iii) any information which is defined
as confidential by law, expressly deemed confidential in this Agreement, or
provided or disclosed, by one party to the other, with notice of its
confidential nature.
"Commencement Date" means June 30, 1997.
"Effective Date" means the date first identified in this Agreement as
the "Effective Date."
"Excluded Expenses" means those information technology expenses
described in Exhibit D(1), the costs for which Excluded Expenses are not
included in the amounts payable to SCT (TMD) under this Agreement but for which
Client, and not SCT (TMD), will remain responsible.
"Hardware" means any and all computers, disk drives, tape drives,
terminals, printers, and other computer hardware and related peripheral
equipment.
"Included Expenses" means those information technology expenses
described in Exhibit D(2), the costs for which Included Expenses are included in
the amounts payable to SCT (TMD) under this Agreement and for which SCT (TMD),
and not Client, will remain responsible, subject to the conditions of Section 6.
"Intellectual Property Rights" means all patents, patent rights,
copyrights, copyright registrations, trade secrets, trademarks, service marks,
trademark and service mark registrations, goodwill pertaining to trademarks and
service marks, and Confidential Information.
"License Agreement" means that certain Software License and Services
Agreement entered into by and between Client and SCT (MDS) on or about the
Effective Date, pursuant to which, inter alia, SCT (MDS) granted Client a right
to use the ADAGE Software and agreed to provide Client with certain
implementation, support and training services in connection with the ADAGE
Software, all under the terms and conditions of such License Agreement, and for
the fees specified therein.
"Location" means, collectively and individually, Client's data
processing facilities in Rochester, New York and Tacoma, Washington.
"Maintenance Agreement" means that certain Software Maintenance
Agreement entered into by and between Client and SCT (MDS) on or about the
Effective Date, pursuant to which, inter alia, SCT (MDS) agreed to provide
Client with certain maintenance for and upgraded versions of the ADAGE Software
under the terms and conditions of such Maintenance Agreement, and for the fees
specified therein.
"Network" means, in each instance, an arrangement of data processing
communications peripherals operating with prescribed protocols, all of which, in
concert, allow computing devices to interface with one another across a defined
area or region.
"OnSite Services" means the information technology services described
in Exhibit A to be provided by SCT (TMD) under this Agreement..
"Operational Responsibility" means management, technical,
troubleshooting, backup and other services to operate the applicable Hardware,
Systems Software, and Application Software.
"Prime Rate" means interest at a fluctuating rate per annum which at
all times will be the lowest rate of interest generally charged from time to
time (determined as of the first business day of each week, which rate will
remain in effect until the first business day of the immediately succeeding
week) by Mellon Bank, N.A., Philadelphia, PA and publicly announced by Mellon
Bank, N.A. as its so-called "prime rate."
"SCT Executive Director" means the SCT (TMD) employee designated by SCT
(TMD) to serve in such position under Section 4.1 of this Agreement, including
such person's successor(s) in that position.
"SCT (MDS)" means SCT Manufacturing & Distribution Systems, Inc., an
affiliate of SCT (TMD) that is also a wholly-owned subsidiary of Systems &
Computer Technology Corporation.
"Secured Early Termination Fee" means the additional applicable amount
payable to SCT (TMD) upon the termination of this Agreement, as set forth in
Section 6.4, which Secured Early Termination Fee is to be secured by a letter of
credit as provided for in that certain schedule attached to this Agreement as
Exhibit F. ,
"Service Enhancement Request" means a request by Client pursuant to
Section 12 that SCT (TMD) provide Supplemental Services, in a written form
signed by both parties and expressly amending this Agreement.
"STIP" means the "Short Term Improvement Plan" described in Exhibit A.
"Supplemental Services" means those additional and separately billable
services which are beyond the OnSite Services described in Exhibit A, and which
SCT (TMD) may otherwise provide at the written request of Client.
"Systems Component" means, alternatively, Hardware, Systems Software
or Application Software.
"Systems" means Hardware, Systems Software, and Application Software,
operating together.
"Systems Software" means the operating systems, database management,
fourth generation computer language facilities, tools, and other systems
software and related documentation contained in the Systems.
"Transitioned Employees" means those individuals who, as of the
Commencement Date, were employees of Client in the Transitioned Positions,
accept an offer of employment with SCT (TMD) as provided for in Section 4.5 of
this Agreement.
"Transitioned Positions" means the Client information technology
positions identified in Exhibit C, which Transitioned Positions will be assumed
and staffed by SCT (TMD) as of the Commencement Date.
"Unsecured Early Termination Fee" means the applicable amount payable
to SCT (TMD) as set forth in Section 6.3, upon the termination of this
Agreement.
"Without Cause" means any termination of employment with SCT (TMD)
other than for Cause.
SECTION 2. SERVICES.
2.1 Included Services. SCT (TMD) will furnish the Client with: (a) the
specific OnSite Services described in Exhibit A in connection with the Systems
Components specifically listed in Exhibit B(1); (b) the use of the Systems
Components generally described in Exhibit B(2); and (c) the specific OnSite
Services described in Exhibit A in connection with the Systems Components
generally described in Exhibit B(2). These OnSite Services, as described in this
Agreement and Exhibit A, are the basis for the financial terms set forth in
Section 6 of this Agreement. This Agreement specifically excludes any
responsibility for providing any services other than those services specifically
set forth in Exhibit A in connection with the Systems Components identified in
Exhibit B(1) and generally described in Exhibit B(2). The Operational
Responsibility for any Systems/Systems Components in addition to those listed in
Exhibits B(1) and B(2) [excepting specifically that SCT (TMD) will assume
Operational Responsibility for the substitutional Systems/Systems Components
generally described in Exhibit B(2) as part of the OnSite Services, and not as
Supplemental Services] will be added at Client's request at a later date,
subject to availability of SCT (TMD) personnel and expertise, pursuant to an
approved Service Enhancement Request (See Section 12).
2.2 Supplemental Services. SCT (TMD) may provide Supplemental Services,
subject to the availability and expertise of SCT (TMD) personnel, at such
additional cost for such Supplemental Services as agreed to by both parties in a
Service Enhancement Request.
SECTION 3. CERTAIN CLIENT OBLIGATIONS.
3.1 Location of Systems. Client will not remove all or any part of the
Systems for which SCT (TMD) has Operational Responsibility from the Location on
or after the Commencement Date without first obtaining SCT (TMD)'s prior written
consent. Neither Client nor SCT (TMD) will remove any markings appearing on any
Hardware, Application Software, or Systems Software signifying ownership
thereof. Notwithstanding the foregoing, Client may relocate its existing data
center to a different Location at Client's sole cost and expense. In such event,
and in addition to all other amounts payable under this Agreement, Client will
reimburse SCT (TMD) for all costs incurred by SCT (TMD) as a result of such
relocation, including relocation and termination costs in connection with SCT
(TMD) personnel providing OnSite Services. In addition, the parties agree to
negotiate in good faith to determine how SCT (TMD) will additionally be
compensated under this Agreement for any increase in costs (such as, but without
limitation, any increased labor costs resulting from Client establishing a
Location in an area with a higher cost of living) that SCT (TMD) realizes as a
result of such Location change.
3.2 Access. Client agrees to permit SCT (TMD)'s authorized personnel,
and third parties as may be authorized by SCT (TMD), access to both the Systems
for which SCT (TMD) has Operational Responsibility, and to such information,
data, data communication services, and communication lines, at such times and
for such purposes as reasonably necessary or appropriate to permit SCT (TMD) to
perform its obligations under this Agreement. Notwithstanding the foregoing,
however, SCT (TMD) will be responsible for maintaining the confidentiality of
such Client Confidential Information as may be accessed by such third parties so
authorized by SCT (TMD) as provided for in this Section 3.2, and will employ
appropriate measures (such as having such third parties execute a
Client-approved non-disclosure agreement) to so protect such Confidential
Information of Client.
3.3 Operation of Systems. In order to permit SCT (TMD) to perform its
obligations under this Agreement, except as otherwise provided for in this
Agreement, no party other than SCT (TMD) will operate the Systems for which SCT
(TMD) has Operational Responsibility, either on site or remotely, without the
prior written consent of SCT (TMD). SCT (TMD) personnel will comply with the
rules of Client with respect to access to Client's offices, data and records.
3.4 Availability of Client Personnel. Upon SCT (TMD)'s reasonable
request, Client agrees to make its personnel, including appropriate professional
personnel, administrative personnel and other employees, reasonably available
for consultation at mutually convenient times to facilitate SCT (TMD)'s
fulfillment of its obligations under this Agreement.
3.5 Facilities and Services to be Provided by Client. Client will
provide to SCT (TMD) use of the following in order to permit SCT (TMD) to
perform its obligations under this Agreement:
(a) Appropriate, reasonable floor and office space and
modifications to space and facilities (if applicable) for the Systems for which
SCT (TMD) has Operational Responsibility, and for all SCT (TMD) personnel
providing OnSite Services, and security and janitorial support for such
facilities;
(b) Utilities, including special power and air conditioning
reasonably required for operation of the Systems for which SCT (TMD) has
Operational Responsibility. Such utility services will include continuous
electrical power and environmental conditioning capacity (including without
limitation a back-up power supply) to meet vendor specifications for operation
of the Systems for which SCT (TMD) has Operational Responsibility, and for
storage of computer supplies;
(c) General office equipment, such as desks, chairs, computer
workstations with Client-standard software and printing capability, files,
supplies, report reproduction capability and telephone service reasonably
requested by SCT (TMD) to accommodate SCT (TMD) personnel rendering the OnSite
Services, in support of Client business activities;
(d) Fire protection equipment to protect against the
destruction of the Systems and computer data stored on-site;
(e) Storage facilities for historical files and back up
materials with which to rebuild data and systems files in the event working
files are destroyed;
(g) On-site storage for expendable computer supplies to
provide a working level of such supplies on hand at all times, with immediate
access to a minimum five (5) days of supply and three (3) day access to a
minimum thirty (30) day supply;
(h) Parking spaces at the same cost and to the same extent
parking is available to Client's employees.
3.6 Client Users. Client will be responsible for and inform SCT (TMD)
in writing of the users authorized to access any of the Systems for which SCT
(TMD) has Operational Responsibility, describing specifically the rights and
types of access each user is granted. Client will not change such rights or
types of access without first informing SCT (TMD) in writing of such change. SCT
(TMD) will not be responsible for any program malfunction or breach of security
caused by any use of such Systems by anyone other than SCT (TMD), whether or not
such user has the right to access the Systems; however, SCT(TMD) will provide
required support to identify, rectify and recover from any such program
malfunction, subject to Client's agreement in any such instance to reallocate
SCT (TMD) personnel providing OnSite Services for that purpose.
3.7 Physical Support. Any changes in physical support provided by
Client (e.g., planned water or power outages and repair work) will be promptly
brought to SCT (TMD)'s attention to allow SCT (TMD) to evaluate the impact on
computer center operations and, where possible, to take action to minimize the
effect on such operations.
3.8 Ownership.
(a) SCT (TMD) will have no ownership, leasehold and/or other
proprietary interest in the existing Systems Components identified in Exhibit
B(1).
(b) As part of the OnSite Services, SCT (TMD) will, during the
term of this Agreement, provide Client with the beneficial use of the Systems
Components generally described in Exhibit B(2). Provided that Client has then
paid to SCT (TMD) all amounts due and owing under this Agreement (including
without limitation both the applicable Unsecured Early Termination Fee provided
for in Exhibit E and the Secured Early Termination Fee provided for in Exhibit
F), upon the expiration or earlier termination of this Agreement, SCT (TMD) or
its financial assignee will convey or arrange to convey to Client an ownership
interest in and to the Hardware listed on Exhibit B(2), and a continuing right
of use for the Systems Software and Application Software. Client agrees to
cooperate with SCT (TMD) and/or its financial assignee, and to execute such
documents as are reasonably necessary to effect conveyance of the aforesaid
interests in the Hardware, Systems Software, and Application Software generally
described in Exhibit B(2) to Client. Until such time as SCT (TMD) has conveyed
or arranged to convey to Client the ownership interest in and to the Hardware
listed on Exhibit B(2), and a continuing right of use for the Systems Software
and Application Software, Client, at its expense, agrees to maintain
comprehensive property and casualty insurance on such Exhibit B(2) Systems
Components for the full replacement cost therefor [SCT (TMD) acknowledging that,
as of the Effective Date, such coverage would be subject to a $500,000
deductible, but for which deductible amount Client will remain responsible], and
further agrees to take such actions as are reasonably necessary to name SCT
(TMD) or its financial assignee as an additional insured under all such
coverage. Client will provide SCT (TMD) with certificates evidencing such
insurance coverage and SCT (TMD)'s (or its financial assignee's, as applicable)
status thereunder as an additional insured from time to time upon SCT (TMD)'s
reasonable request therefor. Such coverage will be primary coverage for such
Systems Components notwithstanding any insurance SCT (TMD) may maintain in
effect therefor.
(c) Notwithstanding any other provision of this Agreement,
including without limitation Section 3.8(b) above, until such time as Client has
paid to SCT (TMD) all amounts to be paid to SCT (TMD) under this Agreement,
including without limitation the applicable Unsecured Early Termination Fee
provided for in Exhibit E and the Secured Early Termination Fee provided for in
Exhibit F, Client will not sell, gift, transfer, assign, pledge, hypothecate,
divest or otherwise convey or provide any other party with any interest in or to
the Hardware, Systems Software, and Application Software generally described in
Exhibit B(2). Further, and without limitation, Client will execute such
documents as are necessary, including without limitation executing Uniform
Commercial Code financing statements in favor of SCT (TMD) or SCT (TMD)'s
financial assignee (as otherwise permitted under this Agreement), for recording
as a matter of public record.
3.9 New Systems. SCT (TMD) and Client will cooperate and in
good faith mutually agree on the Hardware, Systems Software or Application
Software to be acquired for the good faith estimated capital amounts identified
in Exhibit B(2). SCT (TMD) and Client acknowledge and agree that the acquisition
of such different Hardware, Systems Software, and Application Software may
result in increased expenses and the need or desire for additional services, if
the Hardware, Systems Software and/or Application Software so acquired exceeds
in cost the amounts identified therefor in Exhibit B(2). SCT (TMD) will not be
responsible for any additional services or increased expenses resulting
therefrom unless an approved Service Enhancement Request is executed by the
parties pursuant to which SCT (TMD) will provide the Supplemental Services
specified in the approved Service Enhancement Request. Conversely, to the extent
that expenditures for any Systems Components from the estimated capital amounts
identified in Exhibit B(2) are less then the amounts identified in Exhibit B(2),
SCT (TMD) will credit the amount of such difference against the amounts
otherwise due and owing from Client to SCT (TMD) under this Agreement.
SECTION 4. PERSONNEL
SCT (TMD) will designate an SCT Executive Director, who will be
physically located at Client's Rochester, New York Location, and who will be
responsible for coordinating SCT (TMD)'s efforts in providing the OnSite
Services and for communicating with the Client Contract Administrator with
regard to the OnSite Services and the parties' obligations under this Agreement.
SCT (TMD) may make a change in the SCT Executive Director upon providing Client
with prior written notice that SCT (TMD) is making such change; PROVIDED,
however, that, subject to the conditions set forth in the following sentence,
SCT (TMD) will not make such a change in the SCT Executive Director without
first obtaining Client's written consent until such time as the SCT Executive
Director has served in the capacity for at least twelve (12) months. Client
acknowledges that SCT (TMD)'s ability to so retain the SCT Executive Director
are limited by certain factors beyond the reasonable control of SCT (TMD), such
as the continued employment by SCT (TMD) of the SCT Executive Director or the
death or disability of the SCT Executive Director. Client will have the right to
request the removal of the SCT Executive Director if Client reasonably considers
the SCT Executive Director to be unacceptable. If, after consultation with SCT
(TMD), Client so requests in writing that SCT (TMD) effectuate a change in the
SCT Executive Director position, describing in detail the reason for Client's
decision, SCT (TMD) will replace the existing SCT Executive Director, at no
additional cost to Client therefor.
4.2 Client Contract Administrator. Client will designate a Client
Contract Administrator who will be responsible for communicating with the SCT
Executive Director with regard to the OnSite Services and the parties'
obligations under this Agreement. If Client decides to make a change in such
position, Client will provide SCT (TMD) with written notice that Client is
making such change.
4.3 Other Services. SCT (TMD) personnel may occasionally perform
services for Client at other locations or for others at the Location as long as
the provision of such other services does not have a material adverse impact on
SCT (TMD)'s performance of the OnSite Services.
4.4 Non-Hiring of Employees. Except as specifically provided in this
Agreement, during the term of this Agreement (including any extension thereof)
and for a period of six (6) months thereafter, neither party, nor any party's
related or affiliated organization, will solicit for hire, offer to hire, hire
or in any way employ, engage the services of or otherwise compensate any
employee of, or persons who have been employed during any term hereof by the
other party, without obtaining the prior written consent of the other party.
Notwithstanding the foregoing, the following exceptions will apply:
(a) If this Agreement expires or is terminated, Client may
hire or employ SCT (TMD) employees who were Transitioned Employees and who are
at the time of termination of this Agreement permanently assigned to Client's
site;
(b) Subject to the enforceability of this provision under
applicable law, and except as the parties may otherwise agree to in any
instance, neither SCT (TMD) nor Client may hire or solicit for hiring any
employee who is no longer employed by the other and whose employment with the
other had ended for a period of six (6) months or more prior to the date of the
offer of employment by such other party; and
(c) Either party may immediately hire or solicit for hiring
any former employee of the other if such other party involuntarily terminated
such former employee's employment with the other party for any reason other than
for avoiding any "no hiring" period described in Section described in this
Section 4.4.
4.5 Use of Client Personnel. Client and SCT (TMD) have agreed that SCT
(TMD) will be hiring a number of Client's current employees. In this
connection:
(a) Client will make available to SCT (TMD) for hire by SCT
(TMD) all of Client employees who, as of the Effective Date, were serving in the
Client positions identified in Exhibit C. SCT (TMD) and Client will review, on a
case by case basis, whether SCT (TMD) will offer employment to any Client
employee who served in a Client position identified in Exhibit C but who, for
reasons of incapacity or disability (such as, but without limitation, a Client
employee unable to work at such time because of an injury covered by Client
under Workers Compensation), was not serving in such position as of the
Effective Date. Each such person will become a Transitioned Employee upon
his/her acceptance of employment with SCT (TMD). Except as specifically provided
to the contrary herein, all Transitioned Employees will be retained for thirty
(30) days after the Commencement Date (the "Transition Period"). SCT (TMD) may
terminate any Transitioned Employee during the Transition Period only for Cause.
SCT (TMD) will not be obligated to pay any Transitioned Employee that is
terminated for Cause during the Transitioned Period after the date of such
termination.
(b) During the Transition Period, SCT (TMD) will review the
work performance of each Transitioned Employee. Client agrees to indemnify,
defend and hold SCT (TMD) harmless from, against and in respect of any and all
damages, losses, deficiencies, liabilities, costs and expenses (including
attorneys' fees and expenses) resulting from, relating to or arising out of the
lawful termination of employment with SCT (TMD) of any Transitioned Employees on
or before the expiration of the Transition Period. Client also agrees to
indemnify, defend and hold SCT (TMD) harmless from, against and in respect of
any and all damages, losses, deficiencies, liabilities, costs and expenses
(including attorneys' fees and expenses) resulting from, relating to or arising
out of any claim by a Transitioned Employee against SCT (TMD) based on facts or
allegations which occurred, or promises which were made by Client, prior to the
Commencement Date. SCT (TMD) agrees to indemnify, defend and hold Client
harmless from, against and in respect of any and all damages, losses,
deficiencies, liabilities, costs and expenses (including attorneys' fees and
expenses) resulting from, relating to or arising out of the termination of
employment with SCT (TMD) of any Transitioned Employees after the expiration of
the Transition Period, except with respect to any vacation, sick, and personal
day pay or any benefits of a similar nature accrued prior to the Commencement
Date.
(c) Client will provide to SCT (TMD) an accounting of
vacation, sick, and personal days, or other similar benefits, accrued as of the
Commencement Date for all Transitioned Employees who are retained by SCT (TMD)
beyond the Transition Period. Client will be responsible for any liability to
any Transitioned Employee in connection with all such benefits accrued by such
Transitioned Employee prior to the Commencement Date.
SECTION 5. TERM
Subject to the events of termination of Section 13, the initial term of
this Agreement will commence on the Commencement Date and continue for a period
of 120 months.
SECTION 6. FINANCIAL TERMS
6.1 Fees. For the OnSite Services, SCT (TMD) will invoice Client on the
first business day of each month during the term of this Agreement, one-twelfth
(1/12th) of the applicable "Annual Payment" amount set forth in the schedule
contained in Exhibit D. The amounts payable to SCT (TMD) under this Agreement
include certain fees that would otherwise be paid to SCT (MDS). Supplemental
Services will be invoiced monthly, as such Supplemental Services are provided.
All amounts invoiced under this Agreement will be due thirty (30) days from the
date of invoice issuance.
6.2 Annual Labor Cost Adjustment. For each July 1 during the Term
(beginning July 1, 1998), SCT (TMD) will calculate an annual labor cost
adjustment to the "labor component" of each payment set forth in Exhibit D, with
such annual labor cost adjustment to be no less than five percent (5%) and no
more than seven percent (7%) for any given one (1) year period, all calculated
as follows: If on January 1, 1998, and on any January 1 thereafter during the
term of this Agreement, the Consumer Price Index for Urban Wage Earners and
Clerical Workers, US average, presently published by the Bureau of Labor
Statistics of the Department of Labor, is higher than the Consumer Price Index
on January 1 immediately prior thereto (for this purpose, the latest January 1
being called the "Current Index" and the immediately preceding January 1 being
called the "Base Index"), then on each subsequent July 1 during the term of this
Agreement (beginning July 1, 1998), the "labor component" of each payment set
forth in Exhibit D for the year beginning on that July 1 will be deemed,
automatically without any further act by either party, increased accordingly to
reflect the percentage increase of the then-Current Index over the then Base
Index (subject to the limitations provided for above), compounded in each year
by the labor cost adjustment applied for each previous year that this Agreement
was in place. SCT (TMD) will calculate the annual labor cost adjustment and
inform Client in writing of the results of the calculation.
If, for any period, SCT (TMD) believes that the labor cost adjustment provided
for in this Section 6.2 should be increased above seven percent (7%) for any
year beginning July 1 to reflect labor cost increases which have occurred
because such increase does not adequately cover increasing labor costs, then the
parties will negotiate in good faith to determine whether the "labor component"
of each payment set forth in Exhibit D will be increased to reflect all or any
such portion of such labor cost increases.
Without limiting any of the foregoing, promptly after receipt of Client's
reasonable request therefor, SCT (TMD) will provide Client with data (such data
which might include, without limitation, labor cost and wage statistics for the
information technology industry from established survey providers for such
information) supporting the provision of the labor cost adjustments made
pursuant to this Section 6.2.
6.3 Unsecured Early Termination Fee. Client will pay SCT (TMD) the
applicable Unsecured Early Termination Fee pursuant to the provisions of Section
13.3. Without limiting the foregoing, Client acknowledges and understands that
its obligation to pay SCT (TMD) the Unsecured Early Termination Fee is in
addition to, and not in lieu of, Client's obligation to secure payment of and to
remit payment of the Secured Early Termination Fee and/or any other amounts to
SCT (TMD)for OnSite Services/Systems Components provided by SCT (TMD) through
the date of expiration or earlier termination of this Agreement as otherwise
provided for in this Agreement, but all without prejudice to SCT (TMD)'s other
rights and remedies in the event of Client's material breach of this Agreement.
6.4 Secured Early Termination Fee and Letter of Credit. Client, at its
sole cost therefor, agrees to secure its obligation to pay to SCT (TMD) the
Secured Early Termination Fee set forth in Exhibit F with an irrevocable letter
of credit issued in favor of SCT (TMD) by CoBANK of Denver, Colorado. Such
letter of credit must be in a form first approved by SCT (TMD), and will require
payment to SCT (TMD) of the Secured Early Termination Fee in the applicable
amounts provided for as of the dates in Exhibit F upon the expiration/earlier
termination of this Agreement pursuant to the provisions of Section 13.3. Client
will cause the letter of credit so securing payment of the Secured Early
Termination Fee to be issued in favor of SCT (TMD) within fifteen (15) days
after the Effective Date of this Agreement, and such letter of credit will
remain in full force and effect in the applicable amounts and for the period
provided for in Exhibit F. Without limiting the foregoing, Client acknowledges
and understands that its obligation to secure payment of and to in fact pay to
SCT (TMD) the Secured Early Termination Fee is in addition to, and not in lieu
of, Client's obligation to remit payment of the Unsecured Early Termination Fee
and/or any other amounts to SCT (TMD) for OnSite Services/Systems Components
provided by SCT (TMD) through the date of expiration or earlier termination of
this Agreement as otherwise provided for in this Agreement, but all without
prejudice to SCT (TMD)'s other rights and remedies in the event of Client's
material breach of this Agreementpre.
6.5 Client Financial Responsibility/ Reconciliation Processes. Client
will be responsible for all costs associated with Client data processing
incurred through June 29, 1997, inclusive. SCT (TMD) will assume the
responsibility for all costs associated with Client data processing incurred on
or after the Commencement Date, excluding those costs set forth on Exhibit D(1),
which pre-Commencement Date data processing costs will remain the responsibility
of Client. In reviewing the Client financial records referenced in Section 6.8
below, SCT (TMD) has assumed that Client incurred data processing costs ratably
over the course of a year. As soon as reasonably practicable, the parties will
reconcile the costs incurred (as opposed to amounts expended) for Client data
processing through June 29, 1997, and the parties will adjust the costs between
themselves accordingly.
6.6 Taxes. Taxes [other than taxes on SCT (TMD)'s net income, gross
receipts, capital stock, or Included Expenses and associated Hardware] imposed
by any taxing authority and based upon any OnSite Services or other goods and
services furnished, or payments made under this Agreement, will be the
responsibility of Client and will be payable in addition to all other amounts
and charges.
6.7 Interest. Without waiving any other right, balances of any kind
past due in excess of thirty (30) days will bear interest at the lesser: of the
Prime Rate plus three (3%) percent per annum; or the highest rate permitted by
the laws of the State of New York.
6.8 Pay Agent Status. Client hereby designates SCT (TMD) as Client's
pay agent for data processing related purchases and acquisitions, so that SCT
(TMD) can, on behalf of Client, make payments to vendors providing goods and/or
services to Client of the type for which SCT (TMD) assumes Operational
Responsibility under this Agreement. Client covenants and agrees that it will
promptly take all actions reasonably necessary to effect such designation of SCT
(TMD) as Client's pay agent as provided for in this Section 6.8.
6.9 Client Financial Representations. Client has represented to SCT
(TMD) certain financial and budgetary information concerning Client's costs for
providing data processing services for which SCT (TMD) will now be providing
OnSite Services, and Client acknowledges that SCT (TMD) has materially relied on
Client representations in determining the OnSite Services to be provided by SCT
(TMD) and the amounts to be paid by Client under this Agreement.
6.10 Good Faith Management of Included Expenses. Exhibit D(2) sets
forth an annual limitation on Included Expenses. SCT (TMD) has made a good
faith estimate of such annual Included Expenses amounts based upon information
provided by Client to SCT (TMD). Accordingly, SCT (TMD) agrees to use good
faith efforts in managing expenditures under such Included Expenses amounts,
and, prior to any such expenditure, to notify Client of the amount and the
purpose for any expenditures that would materially exceed such amounts. For
any expenditure that would so materially exceed such annual Included Expenses
amounts, the parties agree to negotiate in good faith as to how the costs for
such excess amounts will be borne by the parties.
6.11 Rights of SCT (TMD) Regarding Financial Assignee of SCT (TMD).
Notwithstanding the restrictions provided for in Section 15.3 of this Agreement,
Client acknowledges that SCT (TMD) intends to engage the financial services of a
third party bank, leasing company or similar financing entity, for the purpose
of assisting SCT (TMD) in financing all or some portion of the transactions
provided for in or otherwise contemplated by this Agreement. The parties further
agree that it is in their mutual best interest under this Agreement for SCT
(TMD) to so engage such financial services. Client agrees that SCT (TMD) may,
for the purpose of procuring or retaining such financing from such third party,
assign certain of its financial rights (as opposed to its obligations to provide
the OnSite Services) under this Agreement to such third party, such assignable
rights to include, without limitation, SCT (TMD)'s rights under or in connection
with Section 3.8(c); SCT (TMD)'s right to receive payment from Client under this
Agreement upon Client's receipt of written notice from SCT (TMD)'s financial
assignee demanding that such payments be made to such SCT (TMD) financial
assignee instead of to SCT (TMD) [the parties acknowledging that Client's
remittance of such payments to SCT (TMD)'s financial assignee is such instances
will act to satisfy Client's obligation to otherwise remit such payments to SCT
(TMD)]; and the like. To that end, Client will cooperate with SCT (TMD) and SCT
(TMD)'s financial assignee to effect any such assignment of rights by SCT (TMD),
such cooperation to include, without limitation and without prejudice to any
claims or defenses that Client might otherwise have, executing such reasonable
documentation to effect such assignments as may be reasonably requested by SCT
(TMD) or its financial assignee. The parties further agree that, subject to all
other terms and conditions of this Agreement, Client's payment to SCT (TMD)'s
financial assignee of any amounts that Client would otherwise pay to SCT (TMD)
will not relieve SCT (TMD) of its obligation to provide the OnSite Services, and
will not act to permit any degradation in SCT (TMD)'s performance of such OnSite
Services.
SECTION 7. INSURANCE.
SCT (TMD), at its expense, will secure and maintain at all times during
the period of performance of this Agreement, insurance as set forth in Section
7.2 below. In this connection:
7.1 Certificates of Insurance. Upon receipt of Client's written request
therefor, SCT (TMD) will provide Client with certificates of insurance
(including certificates for renewal coverage, as applicable) with respect to the
insurance maintained by SCT (TMD) as provided in Section 7.2 below.
7.2 Amounts of Insurance; Cross Indemnity.
SCT (TMD) agrees to maintain the following insurance:
(a) Workers' Compensation and Employers' Liability with Workers'
Compensation coverage that meets the requirements of the States of New York,
Washington, Michigan and Georgia, and Employers' Liability coverage with limits
of $500,000 each accident; $500,000 for injury by disease; and $500,000 each
employee for injury by disease.
(b) Disability benefits liability coverage to comply with the laws of
the State of New York, Washington, Michigan and Georgia.
(c) Commercial general liability insurance (including coverage for
liability assumed under this Agreement) for bodily injury and property damage,
personal injury and advertising injury, with limits of (i) $1,000,000 each
occurrence and (ii) $2,000,000 annual aggregate.
(d) Excess "umbrella" liability covering bodily injury, property
damage, personal injury and advertising injury with a limit of not less than
$10,000,000.
(e) Client will be named as an additional insured under the policies
described herein and all policies will be endorsed so that the insurer agrees to
provide 30 days written coverage to Client in the event of cancellation,
non-renewal or material change in coverage.
(f) Notwithstanding any other provisions of this Agreement, SCT (TMD)
and Client each agree that, with respect to damage to property covered by
insurance, the party suffering the loss will release the other party from any
and all liability with respect to such loss to the extent that such loss is
recoverable from insurance proceeds.
In the event any act or omission of a party or its employees, servants,
agents or representatives causes or results in (i) loss, damage to or
destruction of property of the other party or third parties, and/or (ii) death
or injury to persons including, but not limited to, employees or invitees of
either party, then such party will indemnify, defend and hold the other party
harmless from and against any and all claims, actions, damages, demands,
liabilities, costs and expenses, including reasonable attorneys' fees and
expenses, resulting therefrom. The indemnifying party will pay or reimburse the
other party promptly for all such loss, damage, destruction, death or injury.
SECTION 8. COOPERATION
The parties acknowledge and agree that performance under this Agreement
will require the continued definition and setting of priorities, the balancing
of competing tasks and schedules, and the adjustment of priorities over
different tasks and different schedules. The parties will define the activities,
schedules, and deliverables, and relative priorities with respect thereto, for
each year during the term of this Agreement by means of the AWPs. SCT (TMD) and
Client agree that they will each use good faith and reasonable efforts to
define, plan, coordinate and execute the different priorities and schedules
agreed to by the parties within the scope of this Agreement. In the AWPs,
objectives will be established and will be subject to the priorities approved by
Client, based on the services to be provided in each calendar year during the
term of this Agreement as more specifically described in the Scope of Services
set forth in Exhibit A.
SECTION 9. REMEDIES
9.1 DISCLAIMER OF WARRANTIES. SCT (TMD) HEREBY DISCLAIMS ALL WARRANTIES
OF ANY KIND, INCLUDING BUT NOT LIMITED TO, ANY EXPRESS WARRANTIES NOT
INCORPORATED INTO THIS AGREEMENT AND ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE IMPOSED BY LAW OR WHICH COULD OTHERWISE
ARISE IN CONNECTION WITH SCT (TMD)'S PERFORMANCE UNDER THIS AGREEMENT.
9.2 LIMITATION OF LIABILITY.
(A) EXCEPT IN CONNECTION WITH BODILY INJURY (INCLUDING DEATH)
OR PHYSICAL DAMAGE TO TANGIBLE PROPERTY SOLELY CAUSED BY SCT (TMD) [FOR WHICH
SCT (TMD)'S LIABILITY WILL INSTEAD, AND NOT ADDITIONALLY BE LIMITED BY AND
SUBJECT TO THE AVAILABILITY OF THE INSURANCE PROCEEDS UNDER THE INSURANCE
COVERAGE THAT SCT (TMD) IS OBLIGATED TO MAINTAIN UNDER SECTION 7 OF THIS
AGREEMENT), SCT (TMD) AND CLIENT ACKNOWLEDGE AND AGREE THAT IN NO EVENT WILL SCT
(TMD)'S LIABILITY TO CLIENT, IF ANY, FOR ANY CLAIM OR REASON WHATSOEVER RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT EXCEED THE GREATER OF: (1) FIVE MILLION
DOLLARS ($5,000,000); AND (2) THE FEES FOR ONSITE SERVICES THAT CLIENT, THROUGH
THE DATE THAT SUCH LIABILITY FIRST AROSE, ACTUALLY PAID TO SCT (TMD) FOR ONSITE
SERVICES IN THE YEAR THAT SUCH LIABILITY FIRST AROSE AND IN EACH OF THE TWO (2)
IMMEDIATELY PRECEDING YEARS.
(B) EXCEPT IN CONNECTION WITH A MATERIAL BREACH OF ITS
OBLIGATIONS REGARDING CLIENT'S CONFIDENTIAL INFORMATION, SCT (TMD) WILL NOT BE
LIABLE FOR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOSS OF PROFITS, LOSS OF DATA, AND LOSS OF REVENUES, EVEN IF INFORMED
OF THE POSSIBILITY THEREOF IN ADVANCE. EXCEPT IN CONNECTION WITH A MATERIAL
BREACH OF ITS OBLIGATIONS REGARDING SCT (TMD)'S CONFIDENTIAL INFORMATION, CLIENT
WILL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, LOSS OF DATA, AND LOSS OF
REVENUES, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
(C) THE LIMITATIONS SET FORTH IN THIS SECTION 9.2 APPLY TO ALL
CAUSES OF ACTION IN THE AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF
CONTRACT, BREACH OF WARRANTY, SCT (TMD)'S NEGLIGENCE, STRICT LIABILITY,
MISREPRESENTATION, AND OTHER CAUSES OF ACTION BASED ON SIMILAR LEGAL THEORIES.
(D) SCT (TMD) AND CLIENT FURTHER ACKNOWLEDGE AND AGREE THAT
THEY ARE ENTERING INTO THIS AGREEMENT ON THE UNDERSTANDING THAT THE FEES FOR THE
GOODS AND SERVICES TO BE PROVIDED UNDER THIS AGREEMENT HAVE BEEN SET TO REFLECT
THE FACT THAT CLIENT'S REMEDIES, AND SCT (TMD)'S LIABILITY, WILL BE LIMITED AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, AND IF NOT SO LIMITED, THE FEES FOR THE
SAME WOULD HAVE BEEN SUBSTANTIALLY
HIGHER. THE PARTIES HAVE AGREED THAT THE LIMITATIONS SPECIFIED IN THIS SECTION
9.2 WILL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS
AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.
9.3 Internal Resolution Procedure. In the event that the parties have
any disagreement, dispute, breach or claim of breach, non-performance, or
repudiation arising from, related to or in connection with this Agreement or any
of the terms or conditions hereof, or any transaction under this Agreement
including but not limited to either party's failure or alleged failure to comply
with any of the provisions of this Agreement (hereinafter collectively the
"Dispute"), the parties will first conduct a multi-stage procedure as follows,
it being agreed that for purposes of this Section 9.3, any reference to a
particular representative of a party will also be deemed to include such
particular representative's duly authorized successor or designee and such other
persons as each party deems appropriate:
(a) A party will provide notice to the other party of a Dispute, a copy
of which also will be sent to the Client Contract Administrator and the SCT
Executive Director. Within ten (10) business days of the giving of such notice
of a Dispute, the Client Contract Administrator and SCT Executive Director will
conduct a meeting either to: (i) resolve the matter and set forth such
resolution in writing or (ii) define the Dispute in writing including a
description of the position of each party and the other projects and tasks which
would be affected by the proposed resolution submitted by the Client Contract
Administrator and by the proposed resolution submitted by the SCT Executive
Director. A copy of the writing described in this Section 9.3(a)(i) and (ii)
will be provided to the persons who are to receive notices pursuant to this
agreement in accordance with Section 15.1.
(b) If the Client Contract Administrator and SCT Executive Director are
unable to reach an agreement pursuant to Section 9.3(a) above, then within ten
(10) business days after such meeting, the Vice President of SCT (TMD)
responsible for the implementation of this Agreement (the "SCT (TMD) Vice
President") and the Vice President/Information Systems and Technology of Client
will meet in Philadelphia, Pennsylvania to attempt to reach a resolution of the
matter in light of the description of the Dispute submitted by the parties and
further discussion among and between the parties and their respective
representatives. If they are unable to resolve the Dispute, they will further
define the Dispute in writing based upon discussions held at their meeting, if
appropriate. A copy of the writing described in this Section 9.3(b) will be
provided to the persons who are to receive notices pursuant to this agreement in
accordance with Section 15.1.
(c) If the SCT (TMD) Vice President and the Vice President/Information
Systems and Technology of Client are unable to reach an agreement pursuant to
Section 9.3(b), then within fifteen (15) business days after such meeting, the
President of SCT (TMD)'s Technology Management Division and the Vice President,
Finance/Chief Financial Officer of Client will meet in Philadelphia,
Pennsylvania, which meeting will also be attended by the SCT (TMD) Vice
President and SCT Executive Director and the Vice President/Information Systems
and Technology of Client and the Client Contract Administrator, to attempt to
reach a resolution of the matter in light of the description of the Dispute
submitted by the parties and further discussion among and between the parties
and their respective representatives. If they are unable to resolve the Dispute,
they will further define the Dispute in writing based upon discussions held at
their meeting, if appropriate. A copy of the writing described in this Section
9.3(c) will be provided to the persons who are to receive notices pursuant to
this agreement in accordance with Section 15.1.
(d) If the President of SCT (TMD)'s Technology Management Division and
the Vice President, Finance/Chief Financial Officer of Client are unable to
reach an agreement pursuant to Section 9.3(c), then within fifteen (15) business
days after such meeting, the Chief Executive Officer of SCT (TMD) and the Chief
Executive Officer of Client will meet in Philadelphia, Pennsylvania, which
meeting will also be attended by the party representatives identified in each of
the preceding subsections of this Section 9.3, to attempt to reach a resolution
of the matter in light of the description of the Dispute submitted by the
parties and further discussion among and between the parties and their
respective representatives.
(e) If the parties are unable to resolve the dispute after following
the procedures set forth in subparagraphs (a) through (d) of this Section 9.3,
each party may require the other party to submit to mediation for a period not
to exceed thirty (30) days. A party may require mediation by providing the other
party, within ten (10) days after the meeting has taken place as contemplated by
subparagraph (d) of this Section 9.3, a notice of demand for mediation, which
also will be filed with the American Arbitration Association ("AAA") in
Philadelphia, PA. Within ten (10) business days after the demand for mediation,
representatives of the parties will agree on the selection of the mediator, who
will be experienced in the computer services and software area and who will be
on the list of mediators that exists or is compiled by the AAA. In the event the
parties cannot agree upon the selection of a mediator, the AAA rules for the
selection of a mediator will be followed, except that the selection will be a
person experienced as provided in the immediately preceding sentence. The
parties will move with all deliberate speed to commence the mediation
proceedings and will negotiate in good faith in an attempt to resolve the
Dispute. If the Dispute cannot be resolved within thirty (30) days of the
appointment of the mediator, the parties are entitled to pursue all their
remedies at law and in equity. Each party will pay one half of the fees of the
mediator.
(f) If the parties are unable to resolve the dispute after following
the procedures set forth in this Section 9.3, the parties are entitled to pursue
all their remedies at law and in equity. Notwithstanding the provisions of this
Section 9.3, either party may seek equitable relief at any time without the
necessity of first complying with the provisions of this Section 9.3.
SECTION 10. CONFIDENTIALITY.
10.1 Confidential Information. Both parties agree that:
(a) This Agreement and the terms and conditions contained
herein are the Confidential Information of SCT (TMD).
(b) Neither party will disclose any Confidential Information
of the other party to any third party without first obtaining written consent;
(c) Each party will limit dissemination of the other party's
Confidential Information only to those employees, contractors and agents who
require access thereto to perform their functions under this Agreement and who
sign appropriate nondisclosure agreements to protect such information;
(d) Each party agrees to return the Confidential Information
to the disclosing party upon receipt of written request therefor, except that
Client may keep an archival copy of this Agreement for its records, subject to
all the terms and conditions contained in this Agreement relating to
confidentiality;
(e) Each party agrees that the standard of care to be applied
in the performance of the obligations set forth above will be the standard of
care applied by the receiving party in treating its own Confidential Information
of like importance, but at least reasonable care to prevent unauthorized
copying, use, publication or disclosure.
(f) Subject to Section 10.2, each party acknowledges and
agrees that, in the event of its threatened or actual breach of the provisions
of this Section 10.1, damages alone will be an inadequate remedy, such breach
will cause the other party great, immediate and irreparable injury and damage,
and such other party will therefore be entitled to injunctive and other
equitable relief in addition to, and not in lieu of, any remedies it may have at
law or under this Agreement.
10.2 Exceptions to Confidentiality. The obligation of nondisclosure of
Confidential Information as set forth in Section 10.1 will not apply to any data
or information that:
(a) Was already rightfully in the possession of the receiving
party or any of its related companies prior to disclosure and without
obligation of confidentiality;
(b) Was independently developed by employees having no
access to Confidential Information;
(c) Was rightfully received from a third party without
restrictions on disclosure or use;
(d) Was available by inspection of products or services
marketed without restrictions, offered for sale or leased in the ordinary course
of business by either party hereto or others; or
(e) Was required to be produced or disclosed pursuant to
applicable laws, regulations or court order, provided the receiving party has
given the disclosing party the opportunity to defend, limit or protect such
production or disclosure, and such disclosure is not greater than what was
required to be produced or disclosed.
10.3 Survival Of Obligations; Severability. Section 10 is severable
from all other provisions of this Agreement and will stand on its own and remain
in full force and effect as if it is an agreement unto itself supported by valid
consideration, receipt of which is hereby acknowledged by the parties. The term
of the provisions of this Section 10 will survive termination or expiration of
this Agreement or any determination that this Agreement or any portion hereof or
Exhibit hereto is void, voidable, invalid or unenforceable.
SECTION 11. APPLICATION SOFTWARE RIGHTS.
11.1 Rights to Existing Application Software. Except as otherwise set
forth in this Agreement, Client will retain such right, title and interest in
and to the Application Software listed on Exhibits B(1) and B(2) as it had prior
to the Commencement Date of this Agreement [or, the case of Application Software
generally described in Exhibit B(2), such right, title and interest in and
thereto as
Client is to be granted upon the acquisition of such Application Software, it
being understood that nothing in this Section 11.1 is intended to, and will not
act, to limit in any way Client's obligations under Section 3.8(c) of this
Agreement], and except as otherwise provided for in this Agreement, SCT (TMD)
will have no right, title or interest in or to such Application Software for any
purpose except, to the extent permitted by the applicable agreement relating
thereto, the right to use, modify, enhance and operate such Application Software
in order to perform services under this Agreement and as may be expressly set
forth herein or in a separate written agreement executed between the parties.
Client acknowledges and understands that SCT (TMD) may be prohibited from using,
modifying, enhancing or operating certain Application Software and Systems
Software set forth in Exhibits B(1) or B(2)as a result of restrictions contained
in Client's license agreement in connection therewith. Client will use its best
efforts to grant, or have granted to, SCT (TMD) the right to use, modify,
enhance and operate such Application Software and Systems Software. SCT (TMD)
will have no responsibility to use, modify, enhance or operate any such
Application Software or Systems Software until SCT (TMD) is permitted to do so
by the (as appropriate, amended) terms of any applicable license agreement or by
applicable law.
11.2 Rights to Newly Developed Application Software. Without limitation
or prejudice to any provision of the License Agreement, SCT (TMD) will own all
right, title and interest to any (i) new Application Software developed by SCT
(TMD) pursuant to this Agreement and (ii) modifications, enhancements, or
improvements to Client's existing Application Software or Application Software
of third parties developed by SCT (TMD) pursuant to this Agreement, to the
extent the license agreement relating to such Application Software of third
parties does not grant exclusive rights in any modifications, enhancements and
improvements thereto to the licensor of such Application Software ("Developed
Software"). SCT (TMD), without additional charge therefor, will grant Client a
perpetual, non-exclusive, non-transferable license to use, for Client's in-house
computing operations pursuant to the terms and conditions of this Agreement and
Exhibit G, such Developed Software.
SECTION 12. SERVICE ENHANCEMENT REQUEST.
Client may request changes to, modifications of, and extra work in
addition to that identified in Exhibit A by submitting a Service Enhancement
Request to SCT (TMD) from time to time during the term of this Agreement. SCT
(TMD) will not unreasonably reject any Service Enhancement Request. Upon the
parties' execution of a Service Enhancement Request, the amount to be paid SCT
(TMD) under this Agreement and the time of performance will be adjusted as
specified in the Service Enhancement Request. All such work will be executed
under the terms and conditions specified in this Agreement.
SECTION 13. TERMINATION.
13.1 Events of Termination. This Agreement may be terminated:
(a) By either party, to the extent permitted under applicable
law, if the other ceases to function as a going concern, becomes insolvent,
makes an assignment for the benefit of creditors, files a petition in
bankruptcy, permits a petition in bankruptcy to be filed against it and such
petition is not dismissed within sixty (60) days of filing, or admits in writing
its inability to pay its debts as they mature, or if a receiver is appointed
over a substantial part of its assets;
(b) By SCT (TMD) for Client's failure to pay any invoiced
Exhibit D amount or other material fees/charges under this Agreement by thirty
(30) days after the payment due date [provided that upon SCT (TMD)'s failure to
so receive payment by the end of such thirty (30) day period, SCT (TMD) must
first provide Client with a notice that SCT (TMD) has not received such payment,
and upon SCT (TMD)'s receipt of such past due payment prior to the expiration of
fifteen (15) days after Client's receipt of such notice, such payment default
will be deemed cured), it being understood by SCT (TMD) that Client may elect to
make payment to SCT (TMD) with an express reservation of rights to assure
continued performance by SCT (TMD) under this Agreement pending resolution of
any disputes;
(c) By either party by reason of any other material breach of
this Agreement by the other party which breach has not resulted in a reasonably
acceptable plan for remedy or cure or which breach has not been remedied or
cured after at least (90) days written notice delivered by the aggrieved party
to the other party.
13.2 Transition Plan Upon Expiration or Termination. Upon the
expiration or termination of this Agreement, SCT (TMD) will provide a transition
plan to Client at least sixty (60) days (or such shorter period that may be
dictated by the circumstances of the termination of this Agreement) prior to the
termination date hereof. The transition plan will provide that Client will have
the right to extend offers of employment to SCT (TMD) employees as set forth in
Section 4.4(a). Client may not extend such offers of employment to personnel
more than six (6) months prior to the scheduled transition date unless SCT (TMD)
notifies Client that it intends to transfer an employee, in which case Client
may make an offer to such employee immediately upon such notification. Offers of
employment will identify the position being offered, annual salary, benefits,
date of next review, and the manager to whom the employee will report.
Employment with Client for the employees accepting the offers of employment will
be the date of transition
of OnSite Services back to Client under this Agreement. The transition plan will
identify positions requiring transition, procedures in place supporting all
responsibilities to be transitioned, documentation of existing personnel
actions, and existing or planned projects and support activities.
13.3 Payment of Unsecured and Secured Early Termination Fees. Client
acknowledges and understands that SCT (TMD) is entering into this Agreement on
the understanding that the fees for the goods and services to be provided by SCT
(TMD) to Client pursuant to this Agreement are based on a long term relationship
and that an early termination of this Agreement will have a significant
financial impact on SCT (TMD). Accordingly, upon the termination or expiration
of this Agreement:
(a) Client will pay to SCT (TMD) the applicable Unsecured
Early Termination Fee set forth in Exhibit E based on the increase or decrease,
as applicable, in the Unsecured Early Termination Fee during the calendar year
in which the effective date of termination occurs. For any date falling between
the dates listed in Exhibit E, the amount of the Unsecured Early Termination Fee
will be calculated by straight line interpolation using the two dates between
which the termination date falls and prorating the respective amounts on a daily
basis. The Unsecured Early Termination Fee will be due within thirty (30) days
after the effective date of termination of this Agreement. The applicable
Unsecured Early Termination Fee reflects in part the unamortized costs which
will be incurred by SCT (TMD) as a result of an early termination of this
Agreement. The Unsecured Early Termination Fee is not in the nature of, and will
not be deemed to be, a penalty or liquidated damages, and is due and payable to
SCT (TMD) in addition to, and not in lieu of, the Secured Early Termination Fee.
Notwithstanding the payment of the Unsecured Early Termination Fee by Client,
both SCT (TMD) and Client will be entitled to pursue all their respective rights
and remedies, both at law and in equity.
(b) Client will additionally pay to SCT (TMD) the Secured
Early Termination Fee set forth in Exhibit F based upon the dates provided for
in Exhibit F for maintaining the letter of credit securing the amount of such
Secured Early Termination Fee. For dates falling between the dates provided for
in Exhibit F, the amount of the Secured Early Termination Fee on the applicable
date will be the date on Exhibit F that immediately precedes the date in
question. Upon the termination or expiration of this Agreement, SCT (TMD) or its
financial assignee will have the right to draw upon such letter of credit for
payment of the Secured Early Termination Fee. The applicable Secured Early
Termination Fee reflects in part the unamortized costs which will be incurred by
SCT (TMD) as a result of an early termination of this Agreement. The Secured
Early Termination Fee is not in the nature of, and will not be deemed to be, a
penalty or liquidated damages, and is due and payable to SCT (TMD) in addition
to, and not in lieu of, the Unsecured Early Termination Fee. Notwithstanding the
payment of the Secured Early Termination Fee by Client, both SCT (TMD) and
Client will be entitled to pursue all their respective rights and remedies, both
at law and in equity.
13.4 Rights and Duties Upon Termination. Upon the expiration or
termination of this Agreement and in consideration of Client's payment to SCT
(TMD) of all amounts and charges due to SCT (TMD) in accordance with this
Agreement with or without any reservation of rights by Client:
(a) Each party will cooperate reasonably and in good faith
with the other and/or its designees, so that the transition of OnSite Services
rendered under this Agreement will be timely and efficient and implemented in a
manner so as not to unduly interfere with Client's orderly conduct of its
business or SCT (TMD)'s other operations.
(b) All Client's Confidential Information will be promptly
delivered or returned (as applicable) to Client.
(c) All SCT (TMD)'s Confidential Information will be promptly
delivered or returned (as applicable) to SCT (TMD), except that Client will be
entitled to keep a copy of this Agreement even though this Agreement is the
Confidential Information of SCT (TMD). Client will permit SCT (TMD) access to
remove any of the foregoing and will not inhibit or prevent SCT (TMD) from doing
so in any manner.
(d) All office furniture, equipment, documents, records, books,
tapes, disks and files provided by Client (which have not been disposed of with
Client's permission) will be returned to Client in substantially the same
condition as received, ordinary wear and tear excepted.
(e) Subject to Client's payment to SCT (TMD) of all amounts due
and owing under this Agreement, including without limitation both the applicable
Unsecured Early Termination Fee and the applicable Secured Early Termination
Fee, as part of its undertaking in connection with the transition plan referred
to in Section 13.2 above, all as otherwise provided for in this agreement, SCT
will use diligent efforts and take all action reasonably necessary (including
without limitation executing and filing in appropriate jurisdictions UCC
security interest releases) to promptly convey or arrange to convey to Client
title in and to the Hardware to be listed on Exhibit B(2) and a continuing right
of use for the Software to be listed on Exhibit B(2), free and clear of any
security interests therein, including without limitation the security interests
that Client was required to provide to SCT (TMD) or its financial assignee
pursuant to Section 3.8 [SCT (TMD) representing that it will use the proceeds of
the payment of the applicable Unsecured Early Termination Fee and the applicable
Secured Early Termination Fee to such effect such unencumbered title for such
Exhibit B(2) Hardware to Client, and to pay to SCT (MDS) any sums due and owing
under either the License Agreement and/or the Maintenance Agreement]. Further,
SCT (TMD) and SCT (MDS) will work with Client Cin good faith to assist Client in
transitioning its relationship for the ADAGE Software from SCT (TMD) directly to
SCT (MDS) under the License Agreement and Maintenance Agreement, as applicable.
Such assistance will include, without limitation, promptly reconciling all
appropriate ADAGE Software services and financial transactions for or in
connection with the ADAGE Software, and using diligent, good faith efforts to
minimize any impact that any early termination of this Agreement might otherwise
have on Client's implementation of the ADAGE Software. 13.5 Survival of
Obligations. All Client's obligations relating to SCT (TMD)'s Confidential
Information, Client's indemnity and payment obligations, the obligations of
Client to respect SCT (TMD)'s Intellectual Property Rights, and the provisions
of this Agreement which by their terms survive termination of this Agreement,
will survive termination of this Agreement for any reason. Termination of this
Agreement by either SCT (TMD) or Client according to the terms hereof will be
without prejudice to the terminating party's other rights and remedies under
this Agreement, both at law and in equity.
SECTION 14. SITE REFERENCE.
Client agrees upon SCT (TMD)'s prior and reasonable request to act as a
reference site for SCT (TMD) in connection with the services provided under this
Agreement. In this connection, Client will, upon timely receipt of notice
thereof, make its facilities and personnel reasonably available to SCT (TMD) as
reasonably requested by SCT (TMD) to permit SCT (TMD) to provide site visits to
current and prospective clients and to demonstrate any or all of the services
provided by SCT (TMD) to Client under this Agreement.
SECTION 15. GENERAL.
15.1 Notices. Any notice required or permitted by this Agreement will
be in writing and accomplished by registered or certified mail, personal
delivery, or overnight courier. Such notice will be deemed to have been
delivered three (3) days after it has been mailed by such certified or
registered mail, one day after it has been delivered to the overnight courier,
or upon delivery if sent by hand delivery:
If to SCT (TMD):
SCT Software & Resource Management Corporation
Great Valley Corporate Center
Four Country View Road
Malvern, Pennsylvania 19355
ATTENTION: President, Technology Management Division
With a copy to the same address, ATTENTION: General Counsel
If to Client:
Curtice Burns Foods, Inc.
90 Linden Place
Rochester, New York 14603-0881
ATTENTION: Vice President, Information Systems and Technology
With a copy to the same address, ATTENTION: Chief Financial
Officer
or to such other persons or addresses which Client or SCT (TMD) may from time to
time designate in writing to the other.
15.2 Waiver. Waiver of strict performance of any provision of this
Agreement will not be deemed a waiver nor will it prejudice the waiving party's
right to require strict performance of the same provision or any other provision
in the future unless such waiver has rendered future performance commercially
impossible.
15.3 Assignment. Except as otherwise specifically provided for in this
Agreement, neither this Agreement, nor any of either party's rights or
obligations under this Agreement [except, in the case of SCT (TMD), as otherwise
provided for in Section 6 of this Agreement], will be assignable without the
prior written consent of both parties. For purposes of this Agreement, the
acquisition of
all or substantially all of SCT (TMD)'s outstanding capital stock or assets by a
third party (that is, by an entity NOT controlled by, controlling or under
common control with SCT (TMD)'s parent company, Systems & Computer Technology
Corporation) will constitute an "assignment" requiring the prior written consent
of both parties.
Notwithstanding the foregoing, however, subject to the conditions and
limitations hereinafter set forth, Client may assign this Agreement to any
parent holding company of Client; or to any entity in which Client or its parent
holding company has the right to elect a majority of directors, directly or
indirectly, to the remotest tier; or to any entity formed or acquired after the
Effective Date in which Client or its parent holding company has the right to
elect a majority of directors, directly or indirectly, to the remotest tier; or
to any other surviving entity which results from a merger, acquisition or the
consolidation of Client; (any of the foregoing being referred to as a
"Controlled Affiliate"); PROVIDED, HOWEVER, that if immediately after any of the
foregoing events, the total employment of Client and all its Controlled
Affiliates is not greater than twice the employment of Client and all its
Controlled Affiliates as of the Effective Date. Prior to the effectiveness of
any assignment permitted under this paragraph, Client must notify SCT (TMD) of
such assignment, and the Controlled Affiliate to which Client so assigns its
rights under this Agreement must execute an amendment to this Agreement [in a
form reasonably acceptable to SCT (TMD)] specifying that such Controlled
Affiliate assignee agrees to be bound by all terms and conditions of this
Agreement. Further, in the event of an assignment pursuant to this paragraph,
Client will guarantee such Controlled Affiliate's obligations arising under or
in connection with this Agreement, and Client agrees to execute such
documentation as SCT (TMD) may reasonably request to evidence and effect such
Client position as guarantor. Still further, SCT (TMD)'s obligations regarding
the nature, extend, scope and SCT (TMD) staffing requirements in providing
OnSite Services to such Controlled Affiliate may not be materially greater than
the same obligations that SCT (TMD) had in providing OnSite Services to Client.
A party's failure to abide by the restrictions contained in this
Section 15.3 will constitute a material breach of this Agreement giving rise to
a right of termination of this Agreement by the non-breaching party.
15.4 No Authority. Neither party will have any authority, and neither
party will represent that it has any authority, to assume or create any
obligation, express or implied, on behalf of the other party, except as provided
in this Agreement. Each party is an independent contractor, and this Agreement
will not be construed as creating a partnership, joint venture or employment
relationship between the parties or as creating any other form of legal
association that would impose liability on one party for the act or failure to
act of the other party.
15.5 Governing Law. This Agreement will be interpreted by the laws of
the State of New York.
15.6 Severability. If any part of this Agreement is found to be
invalid, all other provisions will remain in full force and effect and the
provisions found invalid will be enforced to the maximum extent enforceable by
law.
15.7 Force Majeure. Neither party will be liable for any delay or
failure to perform its obligations under this Agreement to the extent that such
delay or failure is caused by a force or event beyond the control of such party,
including without limitation, war, embargoes, strikes, governmental
restrictions, riots, fires, floods, earthquakes, or other Acts of God.
15.8 Further Assurances. Each party will execute, acknowledge and
deliver all documents, provide all information, and take or forbear from all
such action as may be necessary or appropriate to achieve the purposes of this
Agreement.
15.9 Alterations. The waiver, amendment or modification of any
provision of this Agreement or any right, power or remedy under this Agreement,
whether by agreement of the parties or by custom, course of dealing or trade
practice, will not be effective unless in writing and signed by the party
against whom enforcement of such waiver, amendment or modification is sought.
15.10 No Third-Party Beneficiaries. Nothing contained in this Agreement
will be construed to give any person other than SCT (TMD) and Client any legal
or equitable right, remedy or claim under or with respect to this Agreement.
15.11 Copies of Agreement. This Agreement may be executed in any number
of copies, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
15.12 Incorporation by Reference. The Exhibits attached hereto are an
integral part of and are hereby incorporated by this reference into this
Agreement and made a part hereof.
15.13 Number and Gender. All terms and words used in this Agreement
regardless of the number and gender in which they are used, will be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context or sense of this Agreement or any
paragraph or clause herein may require, the same as if such words have been
fully and properly written in the number and gender.
15.14 Headings. The headings of sections and paragraphs, if any, to the
extent used herein are for convenience and reference only, in no way define,
limit or describe the scope or intent of any provision hereof, and therefore
will not be used in construing or interpreting the provisions hereof.
15.15 Client Delay. Any delay, obstruction, or hindrance by Client
which materially impacts SCT (TMD)'s ability to perform its obligations under
this Agreement in a timely manner will excuse a delay in SCT (TMD)'s performance
of its obligations under this Agreement, it being agreed by the parties that SCT
(TMD) will use good faith efforts to minimize the period of any such excusable
delay on the part of SCT (TMD).
15.16 Consents and Approvals. Whenever the consent or approval of a
party under this Agreement is required, the consent or approval, if required to
be obtained from SCT (TMD), must be given by a Senior Vice President or the
President of SCT (TMD)'s Technology Management Division, and if required from
Client, must be given by Client's Vice President/Information Systems and
Technology.
15.17 Right to Subcontract. SCT (TMD) will have the right to enter into
subcontracts with other parties to provide certain of the services to be
provided by SCT (TMD) under this Agreement, although SCT (TMD) will remain
responsible to Client for the performance of any services performed by the
subcontractor.
15.18 Modification of Exhibits. The parties acknowledge that their
intent is to enter into a long term relationship under the terms of this
Agreement. Accordingly, as their respective priorities are modified during the
Term, they will negotiate in good faith to make appropriate revisions and
adjustments to this Agreement, including without limitation to the Exhibits of
this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
SECTION 16. ENTIRE AGREEMENT
THIS AGREEMENT SIGNED BY BOTH PARTIES CONSTITUTES A FINAL WRITTEN
EXPRESSION OF ALL OF THE TERMS OF THIS AGREEMENT AND IS A COMPLETE AND EXCLUSIVE
STATEMENT OF THOSE TERMS. NEITHER PARTY WAS INDUCED TO ENTER INTO THIS AGREEMENT
BY ANY STATEMENTS OR REPRESENTATIONS NOT CONTAINED IN THIS AGREEMENT. ANY AND
ALL REPRESENTATIONS, PROMISES, WARRANTIES OR STATEMENTS BY ANY PARTY OR ITS
AGENTS THAT DIFFER IN ANY WAY FROM THE TERMS OF THIS AGREEMENT WILL BE GIVEN NO
FORCE OR EFFECT. THIS AGREEMENT WILL BE CHANGED, AMENDED OR MODIFIED ONLY BY
WRITTEN INSTRUMENT SIGNED BY BOTH CLIENT AND SCT (TMD) AND WHICH WRITTEN
INSTRUMENT EXPRESSLY AND UNAMBIGUOUSLY STATES THAT A PURPOSE THEREOF IS TO
CHANGE, AMEND OR MODIFY THIS AGREEMENT. THIS AGREEMENT WILL NOT BE MODIFIED OR
ALTERED BY ANY COURSE OF PERFORMANCE BY EITHER PARTY, OR BY USAGE OF THE TRADE.
ANY PURCHASE ORDER OR SIMILAR DOCUMENT WHICH MAY BE ISSUED BY CLIENT IN
CONNECTION WITH ANY SERVICES TO BE PROVIDED UNDER, OR ANY OTHER MATTER RELATING
TO, THIS AGREEMENT WILL BE FOR CLIENT'S INTERNAL PURPOSES ONLY AND ANY TERMS AND
CONDITIONS WHICH MAY BE INCLUDED IN SUCH PURCHASE ORDER OR OTHER DOCUMENT WILL
NOT MODIFY IN ANY MANNER ANY OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND
WILL NOT BIND SCT (TMD) IN ANY MANNER AND WILL BE COMPLETELY INEFFECTIVE AND
UNENFORCEABLE AGAINST SCT (TMD), EVEN IF IT IS INITIALED, SIGNED, OR
ACKNOWLEDGED BY A REPRESENTATIVE OF SCT (TMD). THIS AGREEMENT INCLUDES ALL OF
THE FOREGOING PROVISIONS AS WELL AS ALL EXHIBITS ATTACHED HERETO.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
affixed hereto as of the date first above written.
SCT SOFTWARE & RESOURCE CURTICE BURNS FOODS, INC.
MANAGEMENT CORPORATION
By:/s/ Cathy Welsh By:/s/ Dennis M. Mullen
Name and Title: Cathy Welsh Name and Title: Dennis M. Mullen,
President President & CEO
Consent:
SCT MANUFACTURING &
DISTRIBUTION SYSTEMS, INC.
By: James D. Bennett
Name and Title: J.D. Bennett, Dep. General Counsel
EXHIBIT A
SCOPE OF SERVICES
SCT (TMD) will provide Client with OnSite Services described in this Exhibit A.
The OnSite Services described in this Exhibit A will be the basis for the joint
development of the Short Term Improvement Plan (STIP) and the Annual Work Plans
(AWP), as more fully described in this Exhibit A. These Plans will identify,
more specifically, objectives, programs and schedules to be implemented during
the term of the Agreement, as prioritized by the Client in such Plans. The
parties agree that appropriate implementation details and procedures for all
functions and services described in this Scope of Services will be incorporated
in a procedures manual ("Procedures Manual"). During the Term, the Parties may
also agree on different or additional services and amend this Scope of Services
or the Procedures Manual in writing accordingly.
I. GENERAL
SCT (TMD) will, as more specifically described in this Exhibit A, operate
and manage Client's computing and network environments identified in
Exhibits B(1) and B(2). The Management Information Systems ("MIS") staff
will be available as required to support normal business operations and
to meet the performance commitments. SCT (TMD) will provide personnel and
supplies for the overall management and operation of the above identified
Client's operations and the management and operation of individual
projects in connection therewith in accordance with the AWP. The parties
acknowledge that, from time to time in a given year, the AWP may need to
be amended to reflect changes in the Client's prioritization of OnSite
Services that would otherwise have been provided thereunder.
II. PLANNING AND PROGRESS REPORTING
A.Planning.
SCT (TMD) will provide technology planning services as specified in
this Exhibit A at the strategic, tactical, and operational levels. SCT
(TMD) will develop and maintain the STIP and AWPs, specifying the
service delivery objectives for the time-frames covered by these plans.
Client will participate with SCT (TMD) in the development of the STIP
and AWPs, and have responsibility for establishing appropriate
priorities and policy directions.
1. Short-Term Improvement Program.
Timing. Within ninety (90) days of the Commencement Date, SCT (TMD),
with the cooperation of Client, will develop the STIP for
Client review and approval. The STIP will address initial
priority issues and quality improvement opportunities.
Scope. The STIP will identify actions to:
o Provide short-term service improvements;
o Continue delivery of computer services;
o Identify areas of technology requiring further review during
the AWP process; o Resolve existing critical application
problems;
o "Freeze" the Systems to be replaced by the ADAGE Software at
their respective status as of the Commencement Date, without
further modification except with the approval of the Client
Contract Administrator;
o Identify plans and projects to be completed within the 1998
fiscal year; and
o Validate plans and projects (that is, those produced by
Client prior to the Commencement Date) to be completed in
order to achieve year 2000 Software compliance.
As an addendum to the STIP, in conjunction with the ADAGE Software
project, a master implementation schedule will be provided for the
Hardware, Software and Systems Software to be acquired for
Client's beneficial use as provided for in Exhibit B(2) and
otherwise in this Agreement. A tentative high-level ADAGE Software
implementation schedule is attached to this Exhibit A as
Attachment 1. The parties acknowledge and agree that the actual
master implementation schedule developed and included in the STIP
will vary from Attachment 1 based on a variety of factors, such
as, without limitation, Client's approval of the STIP itself; the
sophistication and complexity of the Exhibit B(2) Hardware,
Software and Systems Software actually selected; the dates upon
which the Exhibit B(2) Hardware, Software and Systems Software are
in fact selected and subsequently acquired; the agreement of the
parties as to whether SCT (TMD) should modify the Application
Software or Client should modify its business processes to address
differences between Client's business processes and the
functionality of the Application Software in question; and the
availability of affected Client personnel to participate in
planning and training sessions. In developing the STIP
implementation schedule, however, the parties agree to use good
faith efforts to conform to the high-level implementation schedule
in Attachment 1.
2. Annual Work Plan.
Timing. SCT (TMD), with the cooperation of Client, will develop an
AWP by May 1998 for the year commencing July 1, 1998, and
thereafter, by May of each year for each following fiscal
year during the term of this Agreement.
Scope. The AWP will identify recommended initiatives and services
which are consistent with the direction established in the
STIP and the annual AWPs. The AWP will identify activities,
schedules, and deliverables for the OnSite Services to be
provided under this Agreement. Specific components of
computing which the parties anticipate will be included in
the AWP include:
o Application Software;
o Hardware and Systems Software environment;
o Network structure supporting Client's information users;
o User-based information access and management methodologies and
services; and
o Ongoing operations and production services supporting
Application Software and Client users.
The AWP will incorporate, in pertinent part, the master
implementation schedule (more fully described under the STIP,
above) for the Hardware, Software and Systems Software to be
acquired for Client's beneficial use as provided for in B(2) and
otherwise in this Agreement.
3. Client Approval of STIP and AWPs
After delivery of the STIP and each AWP, the Client Contract
Administrator will have thirty days to review the plan and to notify
SCT (TMD) in writing of its approval or disapproval thereof, and in the
event of disapproval, the Client Contract Administrator will set forth
the reasons for its disapproval in sufficient detail to permit SCT
(TMD) to modify the Plan to the Client Contract Administrator's
reasonable satisfaction. If after such thirty days have passed and the
Client Contract Administrator fails to so notify SCT (TMD), the Plan
will be deemed approved by the Client.
4. Disaster Recovery Plan
Timing. SCT (TMD) will develop and deliver a disaster recovery plan
by not later than twelve (12) months after the Commencement
Date. The disaster recovery plan will set forth the
procedures to be followed in order to resume Client's
information service operations in the event of fire or other
disaster that creates or results in a long-term interruption
of data processing operations at the Tacoma, Washington or
Rochester, New York Locations.
5. Staff Development Plan
SCT (TMD) will provide to the Client, within six (6) months of the
Commencement Date, a "Training and Development Plan" which will plan
for the education and training of the Transitional Employees.
B. Progress Reporting
1. Annual Report
A report outlining SCT (TMD)'s progress against the STIP (during the
first year of the Agreement) and thereafter, the AWP for the prior
fiscal year (commencing with a report on year ending June 30, 1998)
will be provided to Client Contract Administrator by forty-five (45)
days after the end of each fiscal year during the term of this
Agreement.
2. Progress Report
Progress Reports will be provided on a monthly basis to Client Contract
Administrator. These reports will outline service delivery, project
status and issues requiring the attention of Client Contract
Administrator.
3. Annual Client Survey
SCT (TMD) will provide Client with a survey to be distributed to the
relevant users supported under the scope of this Agreement containing
such questions as mutually determined by the SCT Executive Director and
the Client Contract Administrator. SCT (TMD) will provide Client with
the results of the survey.
III. GENERAL MANAGEMENT AND BUSINESS OPERATIONS - MIS DEPARTMENT
A. Executive Management
SCT (TMD) will provide management services as required in support of
Client's executive level management, including:
o Strategic technical leadership, planning, consulting and
guidance;
o Assistance to Client executive management in the establishment
of policies and procedures governing the access, use and
control of information resources;
o Strategic operations consulting and guidance;
o Management recommendations in support of Client operations; and
o Management of external computing and technology related vendor
relationships.
B. Operational Management
SCT (TMD) will provide operational management services in connection
with Client's computing environments to monitor and control the
delivery of the OnSite Services identified in this Agreement,
including:
o Tactical leadership, planning, consulting and guidance in
the computing area;
o Tactical operations management consulting and guidance;
o Project management of application support and computing
improvement projects;
o Monitoring SCT (TMD)'s provision of OnSite Services to ensure
the services are consistent with established Client policies
and each AWP;
o Coordination of the deployment and assignment of SCT (TMD)
corporate staff to complement and augment SCT (TMD) site-based
staff;
o Management of SCT (TMD) site-based and SCT (TMD)
corporate-based staff performing OnSite Services for Client;
o Support of Client's information systems related committees
and sub-committees; and
o Development of information technology policies and
procedures in connection with Client's information systems.
C. Strategic, Tactical and Operational Planning
SCT (TMD) will provide Client with assistance to plan and define a
program for Client's computing environment, including:
o The joint development of the STIP, AWPs, and Training
and Development Plan;
o Management and coordination of the development of the Plans,
above;
o Evaluation of new technologies and their applicability to
Client's computing operations; and
o Assistance in the development and review of the project
plans for the major projects included in the relevant AWP.
D. Management Reporting
SCT (TMD)'s Director will meet at least monthly with the Client
Contract Administrator to review the status of day-to-day operations, to discuss
issues which have arisen, and to review plans for the upcoming month. In
addition, at either party's reasonable request from time to time during the
performance of this Agreement, the Client Contract Administrator and SCT
Executive Director and any other personnel designated by either the Client
Contract Administrator or the SCT Executive Director will meet to review the
progress of the parties under this Agreement.
Specific reporting to Client will include:
o Monthly reporting to the Client Contract Administrator on
all major aspects of computer services; and
o Providing reports periodically and upon special requests as
reasonably requested by Client including: weekly, monthly,
quarterly and annual and other cyclical printed reports at a
time mutually agreed to by the Client and SCT (TMD).
E. Business Operations
SCT (TMD) will provide business support functions for Client's
computing environment, including:
o Implementing management reporting mechanisms as described in
D. above;
o Developing a Management Information Services Department
Policies and Procedures Manual;
o Putting in place procedures and controls for managing
Department assets: hardware and software inventory
management; forms and supplies management; office equipment,
and hardware/software service contracts;
o Putting in place procedures for measuring and monitoring
organizational performance;
o Participating in annual Client budget process;
o Working with Client to implement controls and procedures for
acquisitions of supplies/services, and other administrative
requirements agreed upon by SCT (TMD) and Client and;
o Cooperating with all Client internal and external audits.
IV. APPLICATION SOFTWARE SERVICES
A. Application Software Support
SCT (TMD) is responsible for managing the support of the Application
Software identified in Exhibit B(1)/generally described in Exhibit B(2)
and specified in the AWPs. SCT (TMD)'s responsibilities include:
o Maintain all existing Client application software until its
planned replacement by the ADAGE Software or other Software,
as applicable;
o With the Client, identify existing Client application
software not replaced with the ADAGE Software and undertake
the conversion necessary for Year 2000 compliance. Such
conversion effort will consist of up to eight (8)
person-years absent Client-requested reallocation or
supplementation of SCT (TMD) personnel resources providing
OnSite Services;
o Provide the necessary MIS resources to support the
implementation of the ADAGE Software. Without limiting the
foregoing, SCT (TMD) will not modify the ADAGE Software in
such a manner as would abrogate the limited warranty
therefor provided to Client by SCT (MDS) under the terms of
the License Agreement, without first obtaining Client's
approval in any instance;
o Definition of Application Software specifications to be used
in evaluating new software solutions for the user community;
o Management and coordination of third party software vendors
in carrying out their agreements;
o Testing, as required to validate processing, data integrity,
year 2000 compliance and/or performance, prior to the
implementation of Application Software;
o Scheduling of production and test parameters consistent with
established procedures;
o Convert, or in certain instances, manage the conversion of
data from existing Application Software to the new
environment;
o Providing for the development of interfaces between the
Application Software. Such interface development effort will
consist of up to eight (8) person-years absent
Client-requested reallocation or supplementation of SCT
(TMD) personnel resources providing OnSite Services; and
o Production turnover of all Application Software.
B. Application Software Maintenance
SCT (TMD) is responsible for ongoing maintenance of the Application
Software operational on the computer systems identified in Exhibit
B(1)/generally described in Exhibit B(2). Client agrees that
modifications or enhancements to the Systems to be replaced by the
ADAGE Software are to be minimized and performed only upon compliance
with the software modification process as defined in the Procedures
Manual . These responsibilities include:
o Analysis of all modifications agreed to by SCT (TMD) and
Client for compliance with established policy and
procedures;
o Designing and monitoring changes;
o Performing program changes in accordance with the
specifications;
o Testing program changes;
o Documenting changes made;
o Implementing changes into production environment, and;
o Avoiding continued use of unsupported software.
C. Data Management
SCT (TMD) is responsible for managing the following aspects of Data
Management:
o Data Integrity;
o Back-up and Recovery;
o Third-party access;
o Security, and;
o Availability.
D. Service Request Processing
SCT (TMD) is responsible for continued support of user community's ad
hoc requests and short range deliverables consistent with the
specification of available resources allocated in the AWP and the
approval of the Client Contract Administrator. This includes:
o Logging of each request, including the requested delivery
time-frame;
o Ensuring appropriate business review and prioritization;
o Tracking each request as progress is made on tasks identified;
o User notification of status of request if completion is
delayed;
o User interaction on matters involving information technology
and its use in their area;
o Definition and clarification of issues to enable appropriate
action to be taken;
o Analysis of service, maintenance, and enhancement requests;
o Designing application changes for consistency with existing
technologies and policies; and
o Programming to complete the agreed upon service requests.
V. TECHNICAL OPERATIONS
SCT (TMD) will have responsibility for the operation and management of
the mainframe and client server environments in Tacoma, WA. and in
Rochester, NY as well as remote access to those systems. SCT (TMD) will
operate the existing mainframe systems in both locations until the
planned transfer of the mainframe environment in Tacoma, WA to
Rochester, NY. After transition to Rochester, NY., SCT (TMD) will
operate the mainframe environment only in Rochester, NY. SCT (TMD) is
responsible for the following in connection with the Hardware, Systems
Software and Application Software identified in Exhibit B(1)/generally
described in Exhibit B(2).
A. General Operations
o Operations and personnel to provide delivery of production
computer services;
o Interaction with the user community to understand their
information requests and provide coordinating assistance in
obtaining computer services;
o Preparing and publishing written reports relative to
computer resource utilization, personnel activity, system
performance/stability and user support activities;
o Establishment and maintenance of standards and procedures
for computer operations;
o Planning for short- and long-term growth potential,
including computer capacity planning, facility planning and
Hardware/Software installation planning.
B. Operations Support
o Monitoring system functions through the use of command
consoles, network monitoring tools, and ancillary support
devices;
o Monitoring system commands issued by the system such as tape
mounts, console replies, printer operation and control unit
operation;
o Maintenance of records and documentation relating to Hardware
and Application Software failures and the provision of notice
of such failures to the appropriate personnel;
o Provision of backup for files and maintenance of tape
rotation policies;
o Provision of assistance and support in problem determination;
o Maintenance of an inventory of computer supplies, including
tapes, ribbons and paper.
C. Technical Services Support
1. Systems Software
SCT (TMD) is responsible for supporting the maintenance of the Systems
Software identified in Exhibit B(1)/generally described in Exhibit
B(2). The goal of this function is to maintain vendor-supported
releases and modification levels of Systems Software without
sacrificing system reliability and availability.
SCT (TMD) is also responsible for maintaining the performance of
Systems Software, including when necessary:
o Altering of system parameters to maintain the performance
and efficiency of the Systems Software;
o Researching, testing, and evaluating available vendor
provided Systems Software.
2. Support Software
SCT (TMD) is responsible for maintenance of all vendor-supported
utility and related software utilized in support of Client's Systems
and related Application Software identified in Exhibit B(1)/generally
described in Exhibit B(2). The goal of this function is to maintain
releases and modification levels of the system support software without
sacrificing System reliability and availability.
SCT (TMD) is responsible for maintaining the effectiveness of the
system support software, including when necessary:
o Vendor contact, coordination and management of vendor
supplied software maintenance;
o Maintenance of the release and modification levels of
existing system support software;
o Supporting an ongoing program for the evaluation of
available application and support utility packages for
Client's use; and
o Monitoring utilization of existing system support software
and providing management reports depicting results with
recommendations for future support.
3. Technical Support
SCT (TMD) is responsible for providing technical support in the form of
consultation, problem determination, and general assistance to Client's
data processing community. The goal of this function is to provide the
benefit of systems programming knowledge and expertise to the Client.
This support is provided in the following categories of service:
o Technical direction;
o Problem resolution; and
o Documentation.
Activities in support of this function are:
o Developing policies and procedures for access to the support
staff;
o Developing reply and escalation procedures for inquiry
follow-up and tracking; and
o Providing statistics and information in the form of
management reports that will allow Client to evaluate the
overall performance of the technical support function.
4. Capacity Planning
SCT (TMD) will periodically review and notify Client promptly in
writing when the System, the Hardware, the Systems Software, the
Application Software or any portion thereof, as identified in Exhibit
B(1) or generally described in Exhibit B(2) is being used to a capacity
at which the Client should consider any upgrade, enhancement and/or
addition to prevent the same from failing to meet reasonable
performance standards.
D. Production Services
SCT (TMD) is responsible for the maintenance and enhancement of
Client's production environment identified in Exhibit B(1)/generally
described in Exhibit B(2). SCT (TMD) is responsible for maintaining
site standards which include production programs, control files and
production documentation. In addition to the foregoing, SCT (TMD) will
monitor changes in the production environment, logging and tracking
problems that develop. These activities include:
o Change Management;
o Problem Reporting;
o Production Documentation Maintenance;
o Production Environment Maintenance; and
o Security Administration.
E. Production Control
SCT (TMD) is responsible for the following:
o Job scheduling;
o Job setup;
o Job submission and checkout;
o Output distribution consistent with existing practices;
o Problem resolution.
F. Data Administration and Security
SCT (TMD) is responsible for those tasks necessary to create and
maintain the data bases essential to the systems identified in
Exhibits B(1) and B(2). These responsibilities include:
o Design of data bases and associated file structures;
o Provide internal training of technical staff to provide
knowledge of data management processes;
o Monitoring of data usage to identify patterns, abuses, and
tuning recommendations with available tools;
o Development and maintenance of recovery procedures for
restoration of the data bases and files to the most current
version possible;
o Perform error correction efforts to correct specific data
integrity problems caused by logical or physical errors;
o Perform problem resolution activities to identify and
correct processing errors causing corruption to data bases
and files;
o Perform capacity planning to provide for availability of
resources for the storage and retrieval of data;
o Provide vendor interaction to maintain relationships with
required providers of data base software and support products;
o Provide support for data translation or conversion, and;
o Provide support for remote third party real-time access.
G. Microcomputer Services
Microcomputers and local area networks (LANs) listed on Exhibit
B(1)/generally described in Exhibit B(2) are supported through
"Technical Services" and "Application Services". SCT (TMD) will
provide the following additional services in connection with those
microcomputers listed on Exhibit B(1)/generally described in Exhibit
B(2).
1. Consulting
SCT (TMD) will provide user consulting services for standard
microcomputer packages identified in Exhibit B(1).
2. Installation and Relocation
SCT (TMD) will provide configuration, installation, and relocation
services for the Client workstations listed in Exhibit B(1)/generally
described in Exhibit B(2).
3. Service
SCT (TMD) will provide maintenance and repair services for all
microcomputers and terminals used in conjunction with the Services
provided in this Agreement either internally or by contracting with a
maintenance vendor. SCT (TMD) will ascertain the number of Client
microcomputers and terminals in use as of the Commencement Date as part
of the inventory to be conducted to ascertain the computing environment
pursuant to Exhibit B(1). SCT (TMD) will provide appropriate
maintenance and repair services within an environment where
microcomputers are refreshed on a four year cycle.
4. New Microcomputer Configuration
Definition of the standard microcomputer will take place for each year
after the first year as part of the AWP process.
VI. DATA NETWORK MANAGEMENT
SCT (TMD) will:
o Provide management, consultative and administrative support
for Client's data network and operating environment, and;
o Be responsible for maintaining Client's network plan,
schematics, and end-user documentation relating to Client's
plan for the management of the wide area and local area
networks.
Changes in Client's wide area and local area networks are expected to
occur over time. SCT (TMD) will inform Client of additional operational
support needs if delivery of other obligations is negatively impacted
by this growth. At such point, SCT (TMD) will notify Client of the need
to consider additional resources. The metric used to determine the
staffing levels required to support the networks will be defined in the
Procedures Manual and will change over time due to changes in
technology and/or tools. SCT (TMD) will provide senior network
technical and administrative support to perform these wide area and
local area network services.
Client and SCT (TMD) will periodically review the nature of the
services required in connection with management of Client's wide area
and local area networks, and will determine whether additional
resources are appropriate to support such wide area and local area
management services, and if so, the manner in which such services will
be provided, e.g., via additional Client resources or via Supplemental
Services from SCT (TMD).
VII. HELP DESK CENTER AND STAFFING
SCT (TMD) will:
Provide a centralized help desk which will be the focal point
for end user support services for Client users. The services
provided by the help desk include:
o Responding to requests from Client staff for
service/support;
o Assistance in the operation of supported applications
identified in Exhibits B(1) and B(2);
o Coordinate hardware acquisition and maintenance;
o Guidance on procedures which support Client computing;
o Support during SCT (TMD)'s posted operating hours, as
such hours are mutually agreed to by Client and SCT
(TMD) and as described in the Procedures Manual;
o On-site consultation and support;
o Automated tracking and reporting software for help desk
operations;
o Route and track calls which require escalation to the
specialized support teams; and
o Maintenance of a technical library of the
documentation, as available from SCT (TMD) and/or as
provided to SCT (TMD), for the Software being supported
by SCT (TMD).
For every 150 additional workstations added to Client's physical
inventory after the Commencement Date of this Agreement (beyond a total
of 800), one additional microcomputer specialist will be required to
augment the help desk staff. SCT (TMD) will notify Client in writing of
the additional costs required to provide such increased staff. Client
will notify SCT (TMD) in writing, by not later than thirty (30) days
after SCT (TMD) provides Client with notice of the additional staff
required, of its desire and intent to acquire the additional staff. If
no notice is provided to SCT (TMD) in connection with Client's election
in connection with the acquisition of such staff, SCT (TMD)'s help desk
support will not be increased.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
VIII. PERFORMANCE MEASUREMENT CRITERIA AND REPORTING
For Client to measure SCT (TMD)'s performance, specific service
components and measurement criteria will be defined for the Systems in
production. In conjunction with the development of the AWP, SCT (TMD) will, by
not later than 180 days after the Commencement Date, collect statistics on,
evaluate, measure, record and provide service levels in connection with the
current, or desired, as mutually agreed to by the parties, baseline performance
of the Systems (the "Baseline Service Levels"). The performance measures set
forth in this Section VIII of Exhibit A apply only to the operation of the
Systems to be provided to Client by SCT (TMD) under the terms of this Agreement.
Notwithstanding the foregoing, neither the Baseline Service Levels nor the
performance measures set forth in this Section VIII of Exhibit A will apply in
the case of a declared disaster (a "Declared Disaster"), as such term is defined
in the disaster recovery plan to be provided by SCT (TMD) to Client under the
terms of this Agreement (the "Disaster Recovery Plan"). The Disaster Recovery
Plan will specify performance measures which will apply in the case of a
Declared Disaster.
MONTHLY PERFORMANCE REVIEW
A monthly review of performance will be held between the SCT Executive
Director and the Client Contract Administrator. SCT (TMD) will notify Client, as
part of the monthly review meeting, of any performance variances and actions
planned to address such variances. SCT (TMD) will not be responsible for
variances from performance measurements resulting from situations beyond the
control of SCT (TMD). If such variance is due to situations within the control
of SCT (TMD), the SCT Executive Director will be required to provide an
explanation of those variances and plans to bring those criteria within the
Performance Levels.
ANNUAL REVIEW
SCT (TMD) will provide, as part of its annual report, an analysis of
SCT (TMD)'s performance against the measurement criteria set forth in this Part
VIII of Exhibit A. Client will notify SCT (TMD) in writing, within ten (10)
business days after the annual review meeting, of any specific areas in which
SCT (TMD)'s performance is inconsistent with the report. If Client fails to so
notify SCT (TMD) of any inconsistencies within the ten (10) business days, such
performance will be deemed consistent with the report. If Client so notifies SCT
(TMD) of any specific areas of inconsistency, SCT (TMD) will have ten (10)
business days to formally respond to Client, either accepting Client's
objections or providing Client with additional information supporting SCT
(TMD)'s analysis. In any event, SCT (TMD) will not be responsible for variances
from performance measurements resulting from situations beyond the control of
SCT (TMD). By mutual agreement, these may be revised to reflect changes in
relevant service components and appropriate performance objectives. The
Performance Goal identified for each service component is that level of
performance which SCT (TMD) will strive to attain. The Performance Level for
each service component is that level of performance which SCT (TMD) should
consistently provide, in all material respects, over an extended period of time
during the term of the Agreement. In addition to the performance criteria set
forth below, each AWP will include, as applicable, standards, such as program
schedules, against which SCT (TMD)'s performance of the tasks identified therein
can be measured.
Management
Timeliness of Status Reports: Status reports will be provided monthly
and annually. Formats of status reports will be mutually agreed to by the SCT
Executive Director and the Client Contract Administrator.
Performance Goal: 100% within one day of schedule
Performance Level: 99% within one week of schedule
Production Services
Job Turnaround: Measures the timeliness for the
processing of scheduled production batch jobs by SCT (TMD).
Performance Goal: 95% within 24 hours
100% within 48 hours
Performance Level: 90% within 24 hours
99% within 72 hours
Timeliness of Reports: Measures the timeliness of the delivery of
centrally printed production reports to the end user departments where
appropriate.
Performance Goal: 90% within 2 hours of scheduled delivery
Performance Level: 90% within one business day
Change Management: Measures the effectiveness of management
in planning and controlling changes to the production environment.
Performance Goal: 99% of changes to the production environment
will be processed and controlled through a
formal Change Management process
Performance Level: 90% of changes to the production environment
will be processed and controlled through a
formal Change Management process
Technical Services Support
Systems Software Currency: Measures the effectiveness of maintaining
Systems Software to appropriate levels of currency.
Performance Goal: Maintain all Systems Software components to
within two major vendor recommended releases of currency
Performance Level: Maintain all Systems Software components to
within three major vendor recommended releases of currency
Critical Problem Resolution: Measures the effectiveness in providing
timely responses to reported Systems Software problems which affect production
system availability, to the extent SCT (TMD) receives support or resolution from
the Systems Software supplier.
Performance Goal: 95% of problems are resolved within 2 hours
of the receipt of the problem report
99% of problems are resolved within 24 hours
of the problem report
Performance Level: 90% of problems are resolved within 24 hours
of the receipt of the problem report
99% of problems are resolved within 72 hours
of the problem report
Non-Critical Problem Resolution: Measures the effectiveness in
providing timely responses to reported Systems Software problems which affect
production system performance or function but do not affect availability, to the
extent SCT (TMD) receives support or resolution from the Systems Software
supplier.
Performance Goal: 95% of problems are resolved within one week
of the receipt of the problem report
99% of problems are resolved within 30 days
of the problem report
Performance Level: 90% of problems are resolved within two
weeks of the receipt of the problem report
95% of problems are resolved within 60 days
of the problem report
Unscheduled Systems Software and Application Software Outages: Measures
the overall effectiveness of the change and problem management functions in
limiting the frequency of production system outages caused by Systems Software.
Performance Goal: 99% up time measured monthly against wall clock
Performance Level: 97.5% up time measured monthly against wall clock
Application Software
Application Software Enhancements: Measures the effectiveness of
completing and implementing
requested and approved
enhancements to Application
Software.
Performance Goal: 95% completed within the approved schedule
once final requirements have been approved
Performance Level: 90% completed within 30 days of the approved
schedule once final requirements have been
approved
Application Software Maintenance: Measures the effectiveness of
completing and implementing
required maintenance to the
Application Software.
Performance Goal: 95% completed within the approved schedule
once final requirements have been approved
Performance Level: 95% completed within two weeks of the
required schedule once final requirements
have been approved
Help Desk
Responsiveness: Measures the effectiveness of Level 1 support through
the percent of calls closed during the first call.
Performance Goal: 80% closed during the first call
Performance Level: 70% closed during the first call
Technical Support: Measures the effectiveness of the Level 2
technical support through the percent of calls
closed within a specific time-frame.
Performance Goal: 90% closed within 24 hours of the call being
forwarded to "level 2" status
Performance Level: 80% closed within 24 hours of the call being
forwarded to "level 2" status
ATTACHMENT 1 TO
EXHIBIT A
(See attached)
[GRAPHIC OMITTED]
EXHIBIT B(1)
EXISTING SYSTEMS COMPONENTS FOR WHICH SCT (TMD) HAS OPERATIONAL RESPONSIBILITY
By not later than ninety (90) days after the Commencement Date, SCT (TMD) will
validate and update the list of the Systems Components installed and in use by
Client as of the Commencement Date SCT (TMD) acknowledges receiving as of the
Effective Date, and which list is deemed incorporated herein by this reference
as fully as if written out below). SCT (TMD) will formally update Exhibit B(1)
as part of each AWP. Exhibit B(1) will be deemed amended to include each Systems
Component for which SCT (TMD) provides Client with a right of use during the
Term. Without limiting the foregoing, SCT (TMD) will formally update Exhibit
B(1) as part of each AWP.
EXHIBIT B(2)
REPLACEMENT SYSTEMS COMPONENTS FOR WHICH SCT (TMD) WILL HAVE
OPERATIONAL RESPONSIBILITY
Based on the following budget limitations, SCT (TMD) will provide Client with
the right of use for the following substitutional Systems over the Term:
Amount
Desktop Workstations $ 750,000
Local Area Network Servers $ 100,000
Desktop Software (including ADAGE Software peripheral $ 150,000
Systems)
ADAGE Software - Application Software $1,000,000
ADAGE Software Implementation [includes estimated travel $1,350,000
and living expenses for SCT (MDS) implementation
personnel]
As part of each AWP, SCT (TMD) will annually update Exhibit B(2) by providing a
listing of all Systems components for which SCT (TMD) has, through the date of
such AWP, obtained a right of use for Client, and such updated Exhibit B(2) will
be deemed automatically incorporated into this Agreement.
EXHIBIT C
TRANSITIONED EMPLOYEE POSITIONS
Location Position FTE
At Montezuma, GA Network Administration 1
At Tacoma, WA Application Developer 1
Computer Operator 1
Enterprise Network Manager 1
Network Administrator 1
Network Support Administrator 1
Network Technician 2
Operations Supervisor 1
Process Analyst 1
Project Manager 1
User Training Specialist 1
At Rochester, NY Application Developer 8
Computer Operator 1
Dir. of Tech. Services Network 1
Dir. of Tech. & Development 1
Dir. of App. Tech. & Development 1
EDI/EC Specialist 1
Network Administration 2
Operations Supervisor 1
PC Tech. Support Specialist 1
Process Analyst 1
Project Manager 3
Sr. Computer Operator 1
Systems Programmer 1
User Training Specialist 1
At Benton Harbor, MI Network Administrator 1
--
Total 37
==
EXHIBIT D
PAYMENT SCHEDULE
Contract Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Annual Payment $5,000,000 $5,200,000 $5,200,000 $5,200,000 $5,200,000 $5,200,000 $5,100,000 $4,849,000 $4,400,000 $4,400,000
Contract Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Labor Component$4,155,000 $3,893,000* $3,130,000* $2,526,000* $2,535,000* $2,440,000* $2,440,000* $2,410,000* $2,410,000*$2,410,000*
<FN>
* Represents portion of Annual Payment that is subject to Cost of Living Adjustment, as provided for in Section 6.2 of Agreement.
</FN>
EXHIBIT D(1)
Excluded Expenses
Data Processing costs associated with the support of equipment and Systems
not identified in Exhibits B(1) and B(2).
License Fees and maintenance costs for the ADAGE Software (and related
software licensed under the License Agreement) in excess of the number of
concurrent users licensed in Exhibit 1 of the License Agreement.
Costs associated with Curtice Burns retained positions.
EXHIBIT D(2)
INCLUDED EXPENSES
Contract Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Not to Exceed $2,329,000 $1,734,000 $1,684,000 $1,043,000 $1,024,000 $1,025,000 $1,025,000 $1,026,000 $1,027,000 $1,022,000
Amount
This Exhibit D(2) represents one component of the total cost of OnSite Services.
The expenses on this Exhibit D(2) are representative of data processing
operating costs such as, but not limited to, the following: Hardware
maintenance, supplies, communications lines, technology refreshment, etc. The
Included Expenses are subject to the conditions of Section 6 under this
Agreement.
EXHIBIT E
UNSECURED EARLY TERMINATION FEE SCHEDULE
The Unsecured Early Termination Fee will be prorated to the effective date of
termination.
Date Amount
As of the Effective Date $ 888,000
June 29, 1998 $ 888,000
June 29, 1999 $1,763,000
June 29, 2000 $2,783,000
June 29, 2001 $2,995,000
June 29, 2002 $3,322,000
June 29, 2003 $3,418,000
June 29, 2004 $2,234,000
June 29, 2005 $1,227,000
June 29, 2006 $ 624,000
June 29, 2007 $ 0
EXHIBIT F
SECURED EARLY TERMINATION FEE SCHEDULE
Date Amount
As of the Effective Date $3,700,000
June 30, 1998 $4,300,000
June 30, 1999 $3,600,000
June 30, 2000 $2,500,000
June 30, 2001 $1,200,00
June 30, 2002 $ 0
EXHIBIT G
DEVELOPED SOFTWARE LICENSE TERMS
SCT (TMD) grants Client a perpetual, non-exclusive, non-transferable license to
use, execute and copy as needed to use the Developed Software, in both object
code and source code form, at any locations and on any number of processors and
related peripherals, all in accordance with all other terms and conditions of
the Agreement. Any rights not expressly granted in this Agreement are expressly
reserved.
(1) Client will not disclose all or any part of the source code for the
Developed Software to any person except: (i) Client employees with a "need to
know"; and (ii) consultants with a "need to know" who, prior to obtaining access
to the Developed Software, have executed a non-disclosure agreement
substantially in a form acceptable to SCT (TMD).
(2) Client can copy the documentation for the Developed Software as
needed for its use in accordance with the terms of the Agreement.
(3) Client is prohibited from causing or permitting the reverse
engineering, disassembly or decompilation of the Developed Software. Client will
not allow the Developed Software, in whole or in part, to be exported outside of
the United States of America, in any manner or by any means, without in each
instance obtaining SCT (TMD)'s prior written consent (such consent which SCT
(TMD) will not unreasonably withhold or delay) and, if required, a validated
export license from the Office of Export Administration within the U.S.
Department of Commerce and such other appropriate United States governmental
authorities.
(4) Client may modify, improve, enhance and compile the Developed
Software. Client may develop software derivative of or interfacing with the
Developed Software.
(5) Client is prohibited from removing or altering any of the
Intellectual Property Rights notice(s) embedded in or that SCT (TMD) otherwise
provides with the Developed Software. Client must reproduce the unaltered
Intellectual Property Rights notice(s) in any copies that Client makes of the
Developed Software.
(6) Subject to the payment terms provided for in this Agreement, the
provisions of the license granted hereunder and all related rights and
obligations, will survive the term or termination of this Agreement for any
reason.